Mahmoud Ahmadinejad has been forced to concede that international sanctions against Iran's energy sector are hurting the country's economy.

Facing growing discontent over soaring food prices, the Iranian president accused the West of waging "an all-out, hidden, heavy war" that had impeded Tehran's ability to export oil.

"There are barriers in transferring money, there are barriers in selling oil," he said in a live television talk show.

Although Mr Ahmadinejad predicted that Iran would weather the sanctions, saying "we have oil and the world needs it", his admission stood in stark contrast to earlier claims by his ministers that sanctions were having little impact.

The International Energy Agency estimates that Iranian oil imported by major consumers had fallen to one million barrels a day since the start of the year, a decline of more than a third.

European Union and US sanctions against Iran's energy and financial sectors have caused a sharp decline in the value of the rial, the country's currency, and pushed the price of even staple commodities to a level that many Iranians cannot afford.

Demonstrations erupted last month over the soaring cost of chicken, forcing the government to regulate its price. Many Iranians can no longer afford fruit.

Concerned over rising public anger, Tehran's chief prosecutor this week instructed television stations to avoid "bleak" reporting over the impact of sanctions and instead provide an image of "hope and joy".

"It is expected that the media take more responsibility and understand the circumstances of the situation and refrain from painting a bleak picture and exaggerating the problems," Abbas Jafari Dolatabadi wrote in an opinion piece published by Fars, the state news agency.

"Instead, (the media) should create an atmosphere of hope and joy to prove that they can become a major asset in defending the Islamic Revolution."